Board evaluation - consider focusing on governance outcomes - Aprio

Board evaluation – consider focusing on governance outcomes

This post is inspired by a conversation with board governance advisor, John Dinner.

Sometimes, entering September, I hear more conversations about what makes a worthwhile board evaluation, and whether they can really provoke the necessary changes to improve board performance.

Assessing a board’s performance is a common board best practice though not formally legislated. Typical assessments ask about board competencies and alignment to organization strategic goals, and poke at participation and engagement to remind directors of their accountabilities.

While many assessment processes can be productive in holding boards accountable to fix some shortcomings, some evaluations skirt the real issue of whether the board is performing as a true strategic asset to the organization.

In conversation with board governance advisor, John Dinner, he put forward a new approach, one he’s explored in a recent article: A Focus On Governance Outcomes – Assessing Board Performance. Coming out of John’s own experience across North America and governance precedent he’s researched in South Africa, John explores how an outcomes focused board assessment could better align the board’s performance to the organizations strategic goals.

An outcomes-focused approach could focus on measurements such as:

  • The Board’s impact on the organizations, as opposed to isolated practices;
  • The Board’s value as a strategic asset to the organizations they oversee; and,
  • The Board’s contribution to organizational success in tangible, relevant ways.

John goes on to explain that this shift in the board’s focus is likely to achieve success in the following ways:

  • Refreshing and re-energizing the more traditional approach to board assessments organizations have typically employed, with diminishing returns resulting from the repetitive process.
  • Challenging process participants to think about how the board performs from different perspectives, frustrating some while energizing others.
  • Identifying new opportunities the Board of Directors could leverage to continue on its good governance journey.

While the outcomes-focused board evaluation approach is new, boards could use a familiar evaluation method. Solicit board and select management input with an online survey (easy with Aprio board portal), dig in on key themes with live interviews, then analyze and report on results and develop an action plan to improve board impact on key outcomes.

There’s great practical advice in the article to consider.

Thanks John for some fresh perspective.

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